The United States and the other 30 member countries of the International Energy Agency agreed on March 1 to release 60 million barrels of oil from their emergency reserves to send a unified and strong message to global oil markets that there will be no shortfall in supplies because of Russia’s invasion of Ukraine, the IEA said.
Russia’s invasion comes against a backdrop of already tight global oil markets, heightened price volatility, commercial inventories that are at their lowest level since 2014, and a limited ability of producers to provide additional supply in the short term.
After intensive around-the-clock coordination and consultation by US President Joe Biden, the Administration and US Allies and partners, the IEA Member countries, supported by the European Commission, agreed to a collective release of an initial 60 million barrels of crude oil from the US strategic petroleum reserves, US Press Secretary Jen Psaki said. As part of this agreement, Biden will authorize the Department of Energy to release 30 million barrels from the US Strategic Petroleum Reserve.
IEA Member countries also agreed to continue monitoring markets and consider further releases as necessary.
During the meeting, which was chaired by US Secretary of Energy Jennifer Granholm, ministers expressed solidarity with the people of Ukraine and their democratically elected government in the face of Russia’s appalling and unprovoked violation of Ukraine’s sovereignty and territorial integrity.
The IEA Ministers noted with concern the energy security impacts of the egregious actions by Russia, and voiced support for sanctions imposed by the international community in response, the IEA said in a press release.
“It is heartening to see how quickly the global community has united to condemn Russia’s actions and respond decisively,” IEA Executive Director Fatih Birol said. “I am pleased that the IEA has also come together today to take action. The situation in energy markets is very serious and demands our full attention. Global energy security is under threat, putting the world economy at risk during a fragile stage of the recovery.”
He hailed the IEA member countries’ decision to make available the initial 60 million barrels to provide stability to oil markets. “I am also happy that our member countries committed to do their utmost to support Ukraine in terms of fuel supply. At the invitation of the Governing Board, I am also looking forward to welcoming Ukraine Energy Minister German Galushchenko as a special guest to our forthcoming Ministerial Meeting later this month,” Birol said.
Psaki said the coordinated IEA Release to support global energy security on March 1 is another example of partners around the world condemning Russia’s unprovoked and unjustified invasion of Ukraine and working together to address the impact of Russian President Vladimir Putin’s war of choice. He noted that Biden was clear from the beginning that all tools are on the table to protect American businesses and consumers, including from rising prices at the pump.
“We are prepared to use every tool available to us to limit disruption to global energy supply as a result of President Putin’s actions. We will also continue our efforts to accelerate diversification of energy supplies away from Russia and to secure the world from Moscow’s weaponization of oil and gas,” Psaki said.
IEA members hold emergency stockpiles of 1.5 billion barrels. The announcement of an initial release of 60 million barrels, or 4% of those stockpiles, is equivalent to 2 million barrels a day for 30 days. The coordinated drawdown is the fourth in the history of the IEA, which was created in 1974. Previous collective actions were taken in 2011, 2005 and 1991.
According to the IEA, Russia plays an outsized role on global energy markets. It is the world’s third largest oil producer and the largest exporter. Its exports of about 5 million barrels a day of crude oil represent roughly 12% of global trade – and its approximately 2.85 million barrels a day of petroleum products represent around 15% of global refined product trade. Around 60% of Russia’s oil exports go to Europe and another 20% to China.
The Ministers said on March 1 that energy supply should not be used as a means of political coercion nor as a threat to national and international security. “The IEA Secretariat will continue to closely monitor global oil and gas markets and to provide recommendations to the Governing Board, including possible additional emergency oil stock draws, as needed,” the IEA said.
The Governing Board also encouraged each member country to do its utmost to support Ukraine in the supply of oil products, recommending that governments and consumers maintain and intensify conservation efforts.
Ministers also discussed Europe’s significant reliance on Russian natural gas and the need to reduce this by looking to other suppliers, including via liquefied natural gas (LNG), and to continue to pursue a well-managed acceleration of clean energy transitions, the IEA said, adding that on April 3, the IEA Secretariat will release a 10-Point Plan for how European countries can reduce their reliance on Russian gas supplies by next winter.